Two weeks after war in the Middle East sent global oil markets into turmoil, Nigeria has yet to announce a clear plan to shield its citizens from a surge in fuel prices that is worsening the country’s already painful cost-of-living crisis.
Petrol prices have climbed from about ₦860 per litre before the conflict to more than ₦1,300 in many cities — one of the sharpest increases globally — pushing up transport fares, food prices and production costs across Africa’s largest economy.
While governments from Asia to Europe have moved swiftly with price caps, subsidies, or emergency energy measures, Nigeria’s response has so far been limited to “monitoring the situation.”
In a statement last week, the finance ministry said officials were assessing the economic implications of the conflict but announced no relief policies for households or businesses.
“The EMT is maintaining close coordination across fiscal, monetary, and energy policy institutions, with policy options under continuous review to mitigate volatility and shield households and businesses from external shocks,” the ministry said after a meeting of the government’s Economic Management Team chaired by Finance Minister Wale Edun.
Officials warned that tensions involving the United States, Israel and Iran could disrupt energy markets and global shipping routes.
“The situation remains fluid, with global market uncertainty driven by concerns over disruptions to critical energy supply routes, particularly the Strait of Hormuz,” the ministry said.
Oil shock hits Nigerian consumers
The war has rattled global energy markets. Brent crude — the global benchmark for oil prices and a key reference for Nigeria’s crude exports — surged from around $70 per barrel when the conflict began to more than $100 at points last week.
For Nigeria, Africa’s largest crude producer which scrapped government subsidies in 2023, allowing fuel prices to be strictly determined by dynamics in the international market, the shock is being felt almost immediately at petrol stations.
The biggest refiner in the country, Dangote Refinery, increased its depot price multiple times since the start of the war.
The finance ministry acknowledged that “volatility in global energy markets is driving increases in domestic prices, including fuel, diesel, cooking gas, and fertiliser.”
Higher energy prices quickly ripple through the economy. Transport costs rise, pushing up food prices and production expenses for businesses.
Government officials also warned that geopolitical uncertainty could reduce investment flows into emerging markets like Nigeria while disruptions to shipping routes could raise freight costs and the price of imported goods.
“Disruptions to major shipping routes could raise freight and logistics costs, putting upward pressure on domestic prices,” the ministry said.
Calls for intervention
Labour unions say workers are already struggling to cope.
“The Nigeria Labour Congress voices the collective anguish of millions of Nigerian workers bearing the brutal cost of a global crisis they did not create,” the union said in a statement signed by its president, Joe Ajaero.
The group demanded government intervention, including wage awards, cost-of-living allowances and expanded social transfers.
It also urged authorities to accelerate repairs at Nigeria’s state-owned refineries in Port Harcourt, Warri and Kaduna to reduce exposure to global price shocks.
“The expected oil windfall must be used to cushion the negative effects of the crisis on Nigerians,” the NLC said.
Nigeria could earn as much as ₦30 trillion in additional revenue from higher oil prices linked to the conflict, according to projections cited by the union from the Nigeria Economic Summit Group.
Fuel marketers say the government could reduce pump prices by removing some of the dozens of charges imposed on petroleum products.
Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria, said levies from agencies such as the Nigerian Maritime Administration and Safety Agency, the Nigerian Ports Authority and the Nigerian Midstream and Downstream Petroleum Regulatory Authority add to fuel costs.
“The government should cut down some of these taxes,” he told Punch. “It will help in bringing down the price of petroleum products.”
Ukadike also called for repairs to Nigeria’s fuel pipelines to reduce transport costs and suggested reviving the petroleum equalisation mechanism so that petrol sells at similar prices nationwide.
Countries with sharpest petrol price increases
Data compiled from GlobalPetrolPrices.com, a platform that tracks retail fuel prices across roughly 150 countries, shows that at least 85 nations have recorded petrol price increases since the conflict began.
Nigeria — despite being Africa’s largest crude oil producer — is among the countries experiencing some of the steepest increases.
Cambodia has recorded the sharpest jump, with petrol prices rising about 68 percent, from $1.11 per litre of 95-octane on February 23 to $1.32 on March 11. It is followed by Vietnam at 50 percent, Nigeria at about 35 percent, Laos at 33 percent, and Canada at 28 percent. Independent analysis by Pluboard shows Nigeria’s increase is over 40 percent.
Much of the global volatility is linked to disruptions around the Strait of Hormuz, a critical shipping route connecting the Persian Gulf to the Gulf of Oman and the wider ocean. The narrow waterway is the main export corridor for oil and gas produced in the Gulf region.
Asian economies are particularly exposed. Japan and South Korea import about 95 percent and 70 percent of their crude oil from the Gulf, respectively, leaving both countries highly vulnerable to any disruption in shipments through the strait.
Other countries move quickly
Across the world, governments are already intervening to contain the impact of rising energy prices.
South Korea has imposed a price ceiling on petrol and diesel for the first time in 30 years, while Japan has ordered its strategic oil reserve sites to prepare for a possible release.
Hungary has introduced fuel price caps, while Austria and Germany have limited daily price increases. France has launched inspections to prevent price gouging.
In Asia, Bangladesh has shut universities and Pakistan has moved government offices to a four-day work week to conserve fuel.
China has ordered refiners to halt exports of refined fuel products to protect domestic supply, while India instructed refineries to prioritise liquefied petroleum gas for households.
In Africa, Egypt has capped the price of unsubsidised bread sold by private bakeries in an effort to limit the inflationary impact of higher energy costs.
Policy dilemma for Nigeria
Nigeria faces a difficult balancing act. Policy advisers warn that reinstating fuel subsidies could undermine fiscal reforms.
In a report titled “Boom Not Gloom: Nigeria’s Optimal Policy Response to the US/Israel–Iran War,” the Nigeria Economic Summit Group cautioned against reversing the subsidy removal.
“Calls to reintroduce fuel subsidies as a response to rising transport and food costs should be resisted,” the group said, warning that doing so would risk reviving the fiscal distortions that the reforms were meant to eliminate.
But without swift relief measures, the burden of the oil shock is already falling squarely on Nigerian households.
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